whether, by invoking the doctrine of promissory estoppel, can the Union of India be estopped from withdrawing the exemption from payment of Excise Duty in respect of certain products, which exemption is granted by an earlier notification; when the Union of India finds that such a withdrawal is necessary in the public interest.=we have no hesitation to hold that the withdrawal of the exemption to the pan masala with tobacco and pan masala sans tobacco is in the larger public interest. As such, the doctrine of promissory estoppel could not have been invoked in the present matter. The State could not be compelled to continue the exemption, though it was satisfied that it was not in the public interest to do so. The larger public interest would outweigh an individual loss, if any. In that view of the matter we find that the appeals deserve to be allowed.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 7432 OF 2019
(Arising out of S.L.P.(C) No. 36926 of 2012)
UNION OF INDIA & ORS. …. APPELLANT(S)

VERSUS
M/s UNICORN INDUSTRIES …. RESPONDENT(S)
WITH
CIVIL APPEAL No. 2345 OF 2017 and
CIVIL APPEAL No. 2346 OF 2017
J U D G M E N T
B.R. GAVAI, J.
Leave granted in S.L.P.(C) No. 36926 of 2012.

  1. The question of law that arises for consideration
    in these appeals is, ‘as to whether, by invoking the
    doctrine of promissory estoppel, can the Union of India
    be estopped from withdrawing the exemption from payment
    of Excise Duty in respect of certain products, which
    exemption is granted by an earlier notification; when the
    2
    Union of India finds that such a withdrawal is necessary
    in the public interest.
  2. Since the factual position as well as the
    question of law arising in the present three appeals are
    common, they are heard together and disposed of by this
    common judgment. The appellant, Union of India, in
    exercise of powers conferred by sub-section (1) of
    Section 5A of the Central Excise Act, 1944 (1 of 1994)
    (hereinafter referred to as the “Central Excise Act”)
    read with sub-section (3) of Section 3 of the Additional
    Duties of Excise (Goods of Special Importance) Act, 1957
    (58 of 1957) and sub-section (3) of Section 3 of the
    Additional Duties of Excise (Textiles and Textile
    Articles) Act, 1978 (40 of 1978), being satisfied that it
    is necessary in the public interest, by Notification No.
    71 of 2003 dated 09.09.2003, exempted the goods specified
    in the First Schedule and the Second Schedule to the
    Central Excise Tariff Act, 1985 (5 of 1986) other than
    the goods specified in Annexure-I to the said
    Notification, from the payment of duties under the said
    statutes. The notification provided that so much of the
    duty of excise or additional duty of excise, as the case
    may be, leviable thereon under any of the said Acts as
    was equivalent to the amount of duty paid by the
    3
    manufacturer of the said goods, other than the amount of
    duty paid by utilisation of CENVAT credit under the
    CENVAT Credit Rules, 2002, was exempted. This exemption
    was available to the units located in Industrial Growth
    Centre or Industrial Infrastructure Development Centre or
    Export Promotion Industrial Park or Industrial Estate or
    Industrial Area or Commercial Estate or Scheme Area, as
    the case may be, in the State of Sikkim, as specified in
    Annexure-II appended to the said notification. A
    procedure was also prescribed under the said notification
    for availing the benefit of exemption. Annexure-I thereto
    provides the list of the products which were not entitled
    for exemption. Clause 1 of the said Annexure reads thus:
    “1. Tobacco and Tobacco products including
    Cigarettes/ Cigars/ Gutkha”
    Similar notifications were issued by the Union of
    India being Notification Nos. 32 of 1999-CE and 33 of
    1999-CE dated 08.07.1999 insofar as the State of Assam is
    concerned.
  3. By Notification No. 21 of 2007-CE dated
    25.04.2007, the earlier notifications issued by it were
    amended. The effect of the amendment was that the product
    ‘pan masala’ falling under Chapter 21 of the First
    4
    Schedule of the Central Excise Tariff Act, 1985, the
    goods falling under Chapter 24 of said First Schedule,
    i.e., tobacco and manufactured tobacco substitutes and
    plastic carry bags of less than 20 microns were included
    in the negative list and as such were no longer entitled
    for exemption from the excise duty. Being aggrieved by
    the said notification, the respondent, namely, Unicorn
    Industries in the Civil Appeal arising out of Special
    Leave Petition (C) No. 36926 of 2012, approached the High
    Court of Sikkim by way of Writ Petition (C) No. 22 of
  4. The High Court of Sikkim vide its judgment and
    order dated 11.05.2012 allowed the writ petition and held
    that the petitioner therein was entitled to exemption
    from payment of excise duty on the manufacture of pan
    masala from its unit situated in the State of Sikkim for
    a period of 10 years from the date of commencement of the
    commercial production, i.e., 27.06.2006.
  5. Similarly, the respondent in Civil Appeal No.
    2346 of 2017, namely, M/s Dharampal Satyapal Ltd., which
    was a manufacturer of pan masala with tobacco and other
    tobacco products, approached the Gauhati High Court by
    way of a petition bearing No. PW(C) 749 of 2010. The said
    petition was with regard to withdrawal of exemption in
    respect of pan masala with tobacco. The Single Judge of
    5
    the Gauhati High Court vide judgment and order dated
    10.12.2010 found no substance in the petition and as such
    dismissed the petition. Being aggrieved thereby, the said
    respondent filed Writ Appeal No. 81 of 2011 before the
    Appellate Bench of Gauhati High Court. Vide the judgment
    and order dated 20.04.2016, the Appellate Bench of the
    High Court allowed the appeal; set aside the judgment and
    order passed by the Single Judge dated 10.12.2010 and
    quashed Notification No. 11 of 2007-CE dated 01.03.2007.
    It further directed the Investment Appraisal Committee to
    give an opportunity of hearing to the appellant before it
    (respondent herein) so that it can prove the amount it
    had actually invested in the specified items for availing
    the benefits under the earlier notifications and further
    directed that if the appellant proves that it had
    actually invested the amount, the respondent authorities
    shall refund to the appellant so much of the excise duty
    to which the appellant therein would be entitled as per
    the earlier notifications.
  6. The respondent in Civil Appeal No. 2345 of 2017,
    namely, M/s Dharampal Satyapal Ltd., had also filed
    another petition being Writ Petition (C) No. 749 of 2010
    insofar as its product ‘pan masala without tobacco’, is
    concerned. The same was also dismissed by the learned
    6
    Single Judge of the Gauhati High Court vide the common
    judgment and order dated 10.12.2010. It appears that the
    appeal arising from the said petition being Writ Appeal
    No. 223 of 2011 was separately heard by another Appellate
    Bench of the Gauhati High Court. However, noticing that
    the writ appeal arising out of the order of the Single
    Judge regarding the product of the appellant therein,
    i.e., ‘pan masala containing tobacco’ was already allowed
    by the Appellate Bench of the High Court by Order dated
    20.04.2016, the said writ appeal was also allowed, by the
    judgment and order dated 25.05.2016 thereby setting aside
    the Order passed by the learned Single Judge in Writ
    Petition (C) No. 749 of 2010 so also the Notification
    dated 25.04.2007. The respondent therein was directed to
    refund the excise duty component to the appellant as is
    admissible under the law.
  7. Being aggrieved by the aforesaid judgments and
    orders, one passed by the Sikkim High Court in the writ
    petition and the other two passed by the Gauhati High
    Court in the writ appeals, the Union of India is before
    this Court.
  8. Mr. Dhruv Agrawal, learned senior counsel
    appearing on behalf of the appellants, submits that both,
    7
    the Sikkim High Court as well as the Appellate Benches of
    the Gauhati High Court have grossly erred in allowing the
    writ petition and the writ appeals of the assessees. It
    is submitted that, though the Union of India had
    specifically contended before both the High Courts that
    the 2007 Notifications were issued in the public
    interest, the same has not been considered. It is
    submitted that the Union of India, in exercise of its
    delegated powers, is always empowered to modify and
    withdraw the exemptions granted by it under the earlier
    notification(s). It is submitted that the Union of India,
    taking into consideration the public interest, that the
    consumption of pan masala with tobacco or pan masala
    without tobacco is hazardous to the human health and,
    therefore, for curbing its consumption, had issued the
    2007 Notifications thereby including pan masala in
    Chapter 21 and all products contained in Chapter 24,
    i.e., tobacco and manufactured tobacco substitutes, in
    the negative list. It is submitted that, after taking
    into consideration that the 2007 Notification was issued
    in public interest, the Sikkim High Court ought not to
    have interfered with it. He further submitted that the
    reasoning given by the Sikkim High Court that pan masala
    is not hazardous and, therefore, the 2007 Notification
    cannot be said to be in the public interest is totally
    8
    erroneous. It is further submitted that while doing so,
    the Sikkim High Court has assumed the role of an expert
    in the field and, therefore, travelled beyond its
    jurisdiction.
  9. Insofar as the Gauhati High Court is concerned,
    the learned senior counsel submitted that the learned
    Single Judge of the Gauhati High Court had rightly
    dismissed the writ petitions, finding that in the
    conflict between the interest of an individual and the
    public interest, individual interest should give way to
    the larger public interest. It is submitted that, the
    Appellate Bench of the Gauhati High Court in its judgment
    dated 20.04.2016 has grossly erred in interfering with
    the reasoned order passed by the learned Single Judge. It
    is submitted that, in the said appeal, the product that
    fell for consideration before the Appellate Bench of the
    High Court was Zarda scented tobacco and pan masala
    containing tobacco. It is submitted that, the products
    containing tobacco are indisputably hazardous to health
    and, therefore, the Notification which withdraws
    exemption granted for the manufacture of the said
    products is undoubtedly in the larger public interest.
    However, overlooking this aspect, the appeals have been
    allowed. It is submitted that insofar as the other appeal
    9
    is concerned, the another Appellate Bench has only relied
    upon the judgment by the earlier Appellate Bench and has
    observed that the only distinction in both the matters
    was that in the earlier matter, the issue was with regard
    to pan masala containing tobacco and in the matter before
    them, the issue was with regard to pan masala without
    tobacco and with these observation allowed the appeal.
  10. The learned senior counsel relied on the
    following judgments of this Court in the cases of Kasinka
    Trading vs. Union of India1, Darshan Oils (P) Ltd. vs.
    Union of India2, STO vs. Shree Durga Oil Mills3, Shrijee
    Sales Corpn. vs. Union of India4, State of Rajasthan vs.
    Mahaveer Oil Industries5, Shree Sidhbali Steels Ltd. vs.
    State of U.P.6, DG of Foreign Trade vs. Kanak Exports7,
    Pappu Sweets and Biscuits vs. Commr. Of Trade Tax, U.P.8
    and Commr. of Customs vs. Dilip Kumar & Co.9,.
  11. Shri Balbir Singh and Shri Nakul Dewan, learned
    senior counsel appearing on behalf of the respondents,
    have supported the impugned judgments and orders. It is
    1 (1995) 1 SCC 274
    2 (1995) 1 SCC 345
    3 (1998) 1 SCC 572
    4 (1997) 3 SCC 398
    5 (1999) 4 SCC 357
    6 (2011) 3 SCC 193
    7 (2016) 2 SCC 226
    8 (1998) 7 SCC 228
    9 (2018) 9 SCC 1
    10
    submitted that, the Sikkim High Court as well as the
    Appellate Benches of the Gauhati High Court have rightly
    relied upon the doctrine of promissory estoppel and
    allowed the appeals. It is submitted that, it is only on
    account of the representation given by the Union of India
    and the State Governments that the industries established
    in the notified areas of Sikkim as well as Assam would be
    entitled for 100% exemption from central excise, the writ
    petitioners before the High Court had established the
    industries in such remote areas. It is submitted that,
    the exemption notifications were issued in view of the
    industrial policy of the Union of India as well as the
    State Governments that on account of backwardness in
    these areas, the industrialisation in these areas should
    be promoted so that the economic development takes place.
    It is submitted that, only on the assurance of the
    Central as well as the State Governments, the writ
    petitioners have invested huge amount and, as such, now
    the Union of India could not be permitted in law to
    resile from the assurance given by them to the writ
    petitioners. It is submitted that, considering these
    principles, the Sikkim High Court and the Appellate Bench
    of the Gauhati High Court have granted relief to the writ
    petitioners. It is submitted that, this Court has
    consistently held that, if a party changes its position
    11
    to its detriment, on account of a promise given by the
    other party, the other party cannot be permitted to
    resile from such a promise. It is submitted that the
    doctrine of promissory estoppel is equally applicable to
    the State and its functionaries. Reliance in this respect
    is placed on the following judgments of this Court. M/s
    Motilal Padampat Sugar Mills Co. Ltd. vs. State of Uttar
    Pradesh and Ors.10, Union of India & Ors. Vs. Godfrey
    Philips India Ltd. & Ors.11 and Pawan Alloys & Casting
    Pvt. Ltd. vs. U.P. State Electricity Board & Ors.12.
  12. The issue raised in these appeals is no more res
    integra. This Court in a catena of decisions has
    considered the issue with regard to inapplicability of
    the doctrine of promissory estoppel, when the larger
    public interest demands so. We will refer, in brief, to
    the earlier judgments of this Court.
  13. In the case of Kasinka Trading (supra), this
    Court was considering the case of the appellant, who were
    manufacturing certain products, requiring PVC resin as
    one of the raw materials for its manufacturing process.
    By Notification No. 66 dated 15.03.1979 issued under
    Section 25 of the Customs Act, 1962 which is pari materia
    10 (1979) 2 SCC 409
    11 (1985) 4 SCC 369
    12 (1997) 7 SCC 251
    12
    with Section 5A of the Central Excise Act, the PVC resin
    was exempted from basic import duty. The exemption was to
    be effective till 31.03.1981. However, by Notification
    No. 205 dated 16.10.1980 issued under Section 25 of the
    Customs Act, the exemption granted earlier came to be
    withdrawn. A challenge similar to the one which is raised
    herein was raised before this Court. This Court observed
    thus:
    “12. It has been settled by this Court that
    the doctrine of promissory estoppel is
    applicable against the Government also
    particularly where it is necessary to prevent
    fraud or manifest injustice. The doctrine,
    however, cannot be pressed into aid to compel
    the Government or the public authority “to
    carry out a representation or promise which is
    contrary to law or which was outside the
    authority or power of the officer of the
    Government or of the public authority to make”.
    There is preponderance of judicial opinion that
    to invoke the doctrine of promissory estoppel
    clear, sound and positive foundation must be
    laid in the petition itself by the party
    invoking the doctrine and that bald
    expressions, without any supporting material,
    to the effect that the doctrine is attracted
    because the party invoking the doctrine has
    altered its position relying on the assurance
    of the Government would not be sufficient to
    press into aid the doctrine. In our opinion,
    the doctrine of promissory estoppel cannot be
    invoked in the abstract and the courts are
    bound to consider all aspects including the
    results sought to be achieved and the public
    good at large, because while considering the
    applicability of the doctrine, the courts have
    to do equity and the fundamental principles of
    equity must for ever be present to the mind of
    the court, while considering the applicability
    of the doctrine. The doctrine must yield when
    13
    the equity so demands if it can be shown having
    regard to the facts and circumstances of the
    case that it would be inequitable to hold the
    Government or the public authority to its
    promise, assurance or representation.”
    (emphasis supplied)
  14. It could thus be seen that, this Court has
    clearly held that the doctrine of promissory estoppel
    cannot be invoked in the abstract and the courts are
    bound to see all aspects including the objective to be
    achieved and the public good at large. It has been held
    that while considering the applicability of the doctrine,
    the courts have to do equity and the fundamental
    principle of equity must forever be present in the mind
    of the Court while considering the applicability of the
    doctrine. It has been held that the doctrine of
    promissory estoppel must yield when the equity so demands
    and when it can be shown having regard to the facts and
    circumstances of the case, that it would be inequitable
    to hold the Government or the public authority to its
    promise, assurance or representation. After considering
    the earlier judgments on the issue, which have been
    heavily relied upon by the assesses, this Court has
    observed thus:
    “21. The power to grant exemption from
    payment of duty, additional duty etc. under the
    Act, as already noticed, flows from the
    14
    provisions of Section 25(1) of the Act. The power
    to exempt includes the power to modify or
    withdraw the same. The liability to pay customs
    duty or additional duty under the Act arises when
    the taxable event occurs. They are then subject
    to the payment of duty as prevalent on the date
    of the entry of the goods. An exemption
    notification issued under Section 25 of the Act
    had the effect of suspending the collection of
    customs duty. It does not make items which are
    subject to levy of customs duty etc. as items not
    leviable to such duty. It only suspends the levy
    and collection of customs duty, etc., wholly or
    partially and subject to such conditions as may
    be laid down in the notification by the
    Government in “public interest”. Such an
    exemption by its very nature is susceptible of
    being revoked or modified or subjected to other
    conditions. The supersession or revocation of an
    exemption notification in the “public interest”
    is an exercise of the statutory power of the
    State under the law itself as is obvious from the
    language of Section 25 of the Act. Under the
    General Clauses Act an authority which has the
    power to issue a notification has the undoubted
    power to rescind or modify the notification in a
    like manner.”
    (emphasis supplied)
  15. It could thus be seen that, it has been held by
    this Court that an exemption notification does not make
    the items which are subject to levy of customs duty etc.
    as items not leviable to such duty. It only suspends the
    levy and collection of customs duty etc. subject to such
    conditions as may be laid down in the “public interest”.
    It has further been held that, such an exemption by its
    very nature is susceptible of being revoked or modified
    or subjected to other conditions. It has been held that
    the supersession or revocation of an exemption
    15
    notification in the public interest is an exercise of the
    statutory power by the State under the law itself. It has
    further been held that under the General Clauses Act an
    authority which has the power to issue a notification has
    the undoubted power to rescind or modify the notification
    in a like manner.
  16. This Court, after considering the objections that
    the exemption could not be withdrawn prior to the date
    prescribed in the notification granting exemption has
    observed thus:
    “23. The appellants appear to be under the
    impression that even if, in the altered market
    conditions the continuance of the exemption may
    not have been justified, yet, Government was
    bound to continue it to give extra profit to
    them. That certainly was not the object with
    which the notification had been issued. The
    withdrawal of exemption “in public interest” is a
    matter of policy and the courts would not bind
    the Government to its policy decisions for all
    times to come, irrespective of the satisfaction
    of the Government that a change in the policy was
    necessary in the “public interest”. The courts,
    do not interfere with the fiscal policy where the
    Government acts in “public interest” and neither
    any fraud or lack of bona fides is alleged much
    less established. The Government has to be left
    free to determine the priorities in the matter of
    utilisation of finances and to act in the public
    interest while issuing or modifying or
    withdrawing an exemption notification under
    Section 25(1) of the Act.”
    (emphasis supplied)
    16
  17. It has been observed, that the withdrawal of
    exemption in public interest is a matter of policy and
    the courts would not bind the Government to its policy
    decisions for all times to come, irrespective of the
    satisfaction of the Government that a change in the
    policy was necessary in the public interest. It has been
    held that, where the Government acts in public interest
    and neither any fraud or lack of bona fides is alleged
    much less established, it would not be appropriate for
    this Court to interfere with the same. Ultimately, this
    Court came to the conclusion that the withdrawal of the
    exemption was in the public interest and, therefore,
    refused to interfere with the order of the Delhi High
    Court dismissing the petitions.
  18. In the case of Shree Durga Oil Mills (supra), the
    Government of Orissa had withdrawn the sales tax
    exemption which was granted earlier under the Orissa
    Sales Tax Act, 1947. Considering a similar challenge,
    while reversing the judgment and order of the High Court,
    this Court observed thus:
    “21. Moreover withdrawal of notification was
    done in public interest. The Court will not
    interfere with any action taken by the Government
    in public interest. Public interest must override
    any consideration of private loss or gain.
    17
  19. In the instant case, it has been stated
    on behalf of the State that various notifications
    granting sales tax exemptions to the dealers
    resulted in severe resource crunch. On
    reconsideration of the financial position, it was
    decided to limit the scope of the earlier
    exemption notifications issued under Section 6 of
    the Orissa Sales Tax Act. Because of this new
    perception of the economic scenario of the State,
    the scope of the earlier notifications had to be
    restricted. They were first abrogated altogether
    on 20-5-1977. Thereafter, it was decided to grant
    exemption at a limited scale.
  20. In our opinion, the plea of change of
    policy trade on the basis of resource crunch
    should have been sufficient for dismissing the
    respondent’s case based on the doctrine of
    promissory estoppel. Public interest demanded
    modification of the earlier IPR.”
  21. It could thus be seen that, it has been held that
    when withdrawal of the exemption is in public interest,
    the public interest must override any consideration of
    private loss or gain. In the said case, the change in
    policy and withdrawal of the exemption on the ground of
    severe resource crunch have been found to be a valid
    ground and to be in public interest.
  22. A similar issue came up for consideration before
    the Bench consisting three Judges of this Court in the
    case of Shrijee Sales Corporation (supra). The
    notification which came up for consideration was similar
    with the notifications that fell for consideration in the
    case of Kasinka Trading (supra). While considering the
    18
    argument that when the notification prescribes a period
    during which the exemption would be available, such an
    exemption cannot be withdrawn till the end of the period
    prescribed, this Court observed thus:
    “7. The next question is whether the fact
    that the Notification No. 66 mentioned the period
    during which it was to remain in force, would
    make any difference to the situation. In other
    words, could it be said that an exemption
    notified without specifying the period within
    which the exemption would remain in force, would
    be withdrawn in public interest but not the one
    in which a period has been so specified? Once
    public interest is accepted as the superior
    equity which can override individual equity, the
    principle should be applicable even in cases
    where a period has been indicated. The Government
    is competent to resile from a promise even if
    there is no manifest public interest involved,
    provided, of course, no one is put in any adverse
    situation which cannot be rectified. To adopt the
    line of reasoning in Emmanuel Ayodeji
    Ajayi v. Briscoe, (1964) 3 All ER 556, quoted
    in M.P. Sugar Mills [Motilal Padampat Sugar Mills
    Co. Ltd. v. State of U.P., (1979) 2 SCC 409, even
    where there is no such overriding public
    interest, it may still be within the competence
    of the Government to resile from the promise on
    giving reasonable notice which need not be a
    formal notice, giving the promisee a reasonable
    opportunity of resuming his position, provided,
    of course, it is possible for the promisee to
    restore the status quo ante. If, however, the
    promisee cannot resume his position, the promise
    would become final and irrevocable.”
    (emphasis supplied)
  23. It could thus be seen that this Court observed
    that once public interest is accepted as a superior
    equity which can override an individual equity, the same
    principle should be applicable in such cases where the
    period is prescribed.
    19
  24. The another three Judges Bench of this Court in
    the case of Mahavir Oil Industries (supra) has taken a
    similar view. In the case of Shree Sidhbali Steels Ltd.
    (supra), this Court was considering the question with
    regard to validity of the notification which withdrew
    33.33% of the hill development rebate, on the total
    amount of electricity bill, granted under the earlier
    notification. This Court while considering the similar
    challenge observed thus:
    “33. Normally, the doctrine of promissory
    estoppel is being applied against the Government
    and defence based on executive necessity would
    not be accepted by the court. However, if it can
    be shown by the Government that having regard to
    the facts as they have subsequently transpired,
    it would be inequitable to hold the Government to
    the promise made by it, the court would not raise
    an equity in favour of the promisee and enforce
    the promise against the Government. Where public
    interest warrants, the principles of promissory
    estoppel cannot be invoked. The Government can
    change the policy in public interest. However, it
    is well settled that taking cue from this
    doctrine, the authority cannot be compelled to do
    something which is not allowed by law or
    prohibited by law. There is no promissory
    estoppel against the settled proposition of law.
    Doctrine of promissory estoppel cannot be invoked
    for enforcement of a promise made contrary to
    law, because none can be compelled to act against
    the statute. Thus, the Government or public
    authority cannot be compelled to make a provision
    which is contrary to law.”
    (emphasis supplied)
    20
  25. It could thus be seen that, this Court again
    reiterated the position that where public interest
    warrants, the principle of promissory estoppel cannot be
    invoked. Observing the aforesaid, the said challenge, as
    raised by the petitioner, came to be rejected.
  26. In the case of Kanak Exports (supra), this Court
    again while considering the challenge for withdrawal of
    incentives to the exporters of some specified items held
    that, the incentive scheme in question was in the nature
    of concession or incentive which was a privilege of the
    Central Government. It was for the Government to take a
    decision to grant such a privilege or not. Grant of
    exemption, concession or incentive and modification
    thereof are the matters in the domain of public decisions
    of the Government. It further reiterated that when the
    withdrawal of such incentives was shown to have been done
    in public interest, the courts would not tinker with the
    policy decisions. This Court, after considering the
    materials on record as a matter of fact, held that
    withdrawal of exemption was in the public interest.
  27. It could thus be seen that, it is more than well
    settled that the exemption granted, even when the
    notification granting exemption prescribes a particular
    21
    period till which it is available, can be withdrawn by
    the State, if it is found that such a withdrawal is in
    the public interest. In such a case, the larger public
    interest would outweigh the individual interest, if any.
    In such a case, even the doctrine of promissory estoppel
    would not come to the rescue of the persons claiming
    exemptions and compel the State not to resile from its
    promise, if the act of the State is found to be in public
    interest to do so.
  28. A judicial notice can be taken of the fact that
    by various scientific studies on betel quid and
    substitutes, tobacco and their substitutes, i.e., pan
    masala with tobacco and without tobacco, these products
    have been found to be one of the main causes for oral
    cancer. A detailed study has been considered by three
    Experts, namely, Urmila Nair, Helmut Bartsch and
    Jagadeesan Nair in the Division of Toxicology and Cancer
    Risk Factors, German Cancer Research Centre (DKFZ),
    Heidelberg, Germany. The research paper is titled as
    “Alert for an epidemic of oral cancer due to use of the
    betel quid substitutes gutkha and pan masala: a review of
    agents and causative mechanisms13”. After considering the
    entire material in detail and considering the various
    earlier studies, the paper observes thus:
    13 Mutagenesis Vol. 19 No. 4
    22
    “Perspectives
    Banning of gutkha and pan masala has been
    strongly advocated by oncologists as a preventive
    measure to reduce oral cavity cancers. Recently,
    a number of States in India have banned the
    manufacture and sale of both products and this
    should reduce the incidence rate. Similar
    regulations regarding other health-impairing
    tobacco products which have been on the market
    for centuries, together with cigarettes and bidis
    (an indigenous smoking product), should also be
    reinforced.
    However, for those who are addicted to these
    products or are already affected by premalignant
    lesions, educational interventions to encourage
    stopping the habit are essential. Additionally,
    chemopreventive interventions are being explored.
    Retinoids, NSAIDS and green tea are among the
    promising agents (Garewal, 1994; IUSHNCC, 1997;
    Papadimitrakopoulou and Hong, 1997; Lin et al.,
    2002a). Although a large percentage of lesions
    did respond to treatment, recurrence after
    terminating the chemopreventive regime was also
    observed (Sankaranarayanan et al., 1997), perhaps
    due in part to continuation of the addictive
    habit.
    As with all cancers, early diagnosis is
    important for successful treatment of oral
    cancer, as its prognosis is still very poor.
    There is, nowadays, a strong drive to apply
    proteomics technology to molecular diagnosis of
    cancer. Expression profiling of tumour tissues,
    molecular classification of tumours and
    identification of markers to allow early
    detection, sensitive diagnosis and effective
    treatment are now being explored for oral
    cancers. Genes with significant differences in
    expression levels between normal, dysplastic and
    tumour samples have been reported and this should
    help in better understanding the progression of
    oral squamous cell carcinoma (Kuo et al., 2002;
    Leethanakul et al., 2003).
    DNA aneuploidy in oral leukoplakia in
    Caucasian tobacco users has been found to signal
    a very high risk for subsequent development of
    oral squamous cell carcinomas and associated
    23
    mortality (Sudbo and Reith, 2003; Sudbo et al.,
    2004). A risk assessment model to predict
    progression of premalignant lesions that includes
    histology and a score combining chromosomal
    polysomy, expression and loss of heterozygosity
    on 3p or 9p has also been described (Lee et al.,
    2000; Rosin et al., 2002). Once diagnosed, these
    premalignant lesions could be treated at a much
    earlier stage by chemo preventive agents,
    surgery, chemotherapy and/or intense radiotherapy
    to prevent new lesions and premalignant lesions
    from progressing to invasive cancer.
    Conclusions
    Gutkha and pan masala have flooded the Indian
    market as cheap and convenient BQ substitutes and
    become popular across all age groups wherever
    this habit is practised. There is sufficient
    evidence that chewing of tobacco with lime, BQ
    with tobacco, BQ without tobacco and areca nut
    are carcinogenic in humans (IARC, 1985, 2004).
    These evaluations in conjunction with the
    available evidence on the BQ substitutes gutkha
    and pan masala implicates them as potent
    carcinogenic mixtures that can cause oral cancer.
    Additionally, these products are addictive and
    enhance the early appearance of OSF, especially
    so in young users who could be more susceptible
    to the disease. Although recently some curbs have
    been put on the manufacture and sale of these
    products, urgent action needs be taken to
    permanently ban gutkha and pan masala, together
    with the other well-established oral cancercausing tobacco products. Finally, as the
    consequences of these habits are significant and
    likely to intensify in the future, an emphasis on
    education aimed at reducing or eliminating the
    use of these products as well as home-made
    preparations should be accelerated.”
  29. Recently, the Department of Oral Medicines and
    Radiology, Dental Institute, Rajendra Institute of
    Medical Sciences, Ranchi has through its experts, namely,
    Anjani Kumar Shukla, Tanya Khaitan, Prashant Gupta and
    24
    Shantala R. Naik conducted a study on the subject
    “Smokeless Tobacco and Its Adverse Effects on
    Hematological Parameters: A Cross-Sectional Study14”. The
    study paper considered the consumption of smokeless
    tobacco (SLT) in various forms in India such as pan
    (betel quid) with tobacco, zarda, pan masala, khaini,
    areca nut. After conducting an in-depth analysis, the
    paper concludes and recommends as under”
    “Conclusion and Recommendation
    SLT use has severe adverse effects on
    hematological parameters. The present study might
    serve as an early diagnostic tool in any systemic
    diseases and be helpful in spreading awareness on
    the deleterious effect in the populace consuming
    SLT. Timely intervention among students can
    prevent the initial experimentations with tobacco
    from developing into addiction in adulthood.
    People should be counselled to avoid all habits
    of tobacco and undergo nicotine replacement
    therapy along with antioxidants. Knowledge and
    awareness about systemic and oral ill effects of
    tobacco should be spread through tobacco control
    programs in the pursuit for a tobacco-free
    world.”
  30. It was sought to be argued on behalf of the
    manufacturers of pan masala without tobacco, that the pan
    masala without tobacco stands on a different pedestal
    than the pan masala with tobacco. It was sought to be
    argued that, pan masala without tobacco cannot be
    considered to be hazardous to health. The Department of
    Head and Neck Surgery, Tata Memorial Hospital, Mumbai
    14 Advances in Preventive Medicine 2019
    25
    through its experts Garg A, Chaturvedi P. Mishra A. and
    Datta S. had conducted a study on “A review on Harmful
    Effects of Pan Masala15”. It is to be noted that this
    study is of ‘pan masala without tobacco’. It will be
    apposite to refer to the following observations of the
    said report:
    “Policy Issues Concerning Pan Masala
    Pan masala use is rampant in India by all the
    sections and age groups of the society. It has
    emerged as a major cause of oral cancer in India.
    National Family Health Survey-2 showed that 21%
    of people over 15 years of age consumed PM or
    tobacco. Study in the state of Tamil Nadu showed
    that the age at which people start consuming
    areca nut products ranges from 12 to 70 years.
    58% of the subjects chewed the products more than
    twice a day. Advertising tobacco products
    including PM containing tobacco is banned in
    India since May 1, 2004. To bypass this ban
    tobacco companies are advertising PM ostensibly
    without tobacco, heavily in all forms of media.
    PM is surrogate for tobacco products as the money
    spent on marketing, and advertising is many times
    of the revenue generated from the sale of PM. In
    Mumbai after the ban on PM and gutka the sale has
    come down and the percentage of users quitting
    and reducing the habit was 23.53% and 55.88%
    respectively. The main reason of quitting and
    reduction in consumption was non availability of
    these products. In spite of the ban gutka was
    still available but in different forms or at
    increased cost. Strict law in the form of
    Cigarettes and other Tobacco Products Act 2003
    has been made in India, but the enforcement and
    compliance is lax. There is a need for strong
    enforcement and compliance of laws throughout the
    country. The genotoxic, carcinogenic properties
    and numerous other harmful effects of PM need
    immediate and strict action by the government on
    PM without tobacco as it has banned PM with
    tobacco. The consumers should also be made aware
    15 Indian Journal of Cancer (October-December 2015) Volume 52, Issue 4
    26
    of the harmful effects of PM as they are under a
    false impression that it is not harmful.
    “Conclusion
    Pan masala is widely used across all the strata
    of society and is freely available in many parts
    of the country. It is carcinogenic, genotoxic,
    and has harmful effects on the oral cavity,
    liver, kidneys and reproductive organs.
    Government action is immediately required to
    restrict the consumption and to make the people
    aware about its harmful effects.”
  31. The study which has been conducted in 2004, found
    that gutkha and pan masala have been one of the major
    causes of oral cancer. The Oncologists as early as in
    2004 had strongly advocated banning of gutkha and pan
    masala. They further find that banning the manufacture
    and sale of these products would reduce oral cancer
    incidence rates. It is found that gutkha and pan masala
    have flooded the Indian markets and become popular
    amongst all age groups. It is observed that pan masala
    with tobacco as well as without tobacco have been found
    to be having a potent carcinogenic mixtures that can
    cause oral cancer. It further found that, these products
    are an addictive and enhance the early appearance of oral
    sub-mucous fibrosis (OSMF). It is especially so in the
    young users who could be more susceptible to the disease.
  32. The report further finds that, in the National
    Family Health Survey-2, it has been found that 21% of
    27
    people over 15 years of age consumed pan masala or
    tobacco. The report finds that, though advertising
    tobacco products including pan masala containing tobacco
    is banned in India since 01.05.2004, to bypass this ban,
    tobacco companies are advertising pan masala ostensibly
    without tobacco, heavily in all forms of media. It has
    been found that, after the ban on pan masala and gutkha,
    the sale has come down. The 2016 report finds that, in
    Mumbai, after the ban on pan masala and gutkha, the sale
    has come down and the percentage of users quitting and
    reducing the habit was 23.53% and 55.88% respectively.
  33. It could thus be seen that, by a scientific
    research conducted by Experts in the field, it has been
    found that the consumption of pan masala with tobacco as
    well as pan masala sans tobacco is hazardous to health.
    It has further been found that, the percentage of
    teenagers consuming the hazardous product was very high
    and as such exposing a large chunk of young population of
    this Country to the risk of oral cancer. Taking into
    consideration this aspect, if the State has decided to
    withdraw the exemption granted for manufacture of such
    products, we fail to understand as to how it can be said
    to be not in the public interest.
    28
  34. The Sikkim High Court has observed that the
    appellant herein has been unable to establish any
    overriding public interest, which would make the doctrine
    of promissory estoppel inapplicable. It has further
    observed that, the pan masala has not been declared as
    hazardous to health by any notification or order of the
    Government of India or the State Government. It found
    that, no material or scientific report had been placed on
    record to demonstrate that the pan masala is a health
    hazard. We find that the reasoning arrived at by the
    Sikkim High Court is totally erroneous.
  35. Insofar as the Gauhati High Court is concerned,
    the learned Single Judge by an elaborate reasoning had
    found that the notifications impugned before it was in
    the public interest and further observed that in view of
    the overriding public interest, the doctrine of
    promissory estoppel could not be invoked. Not only that,
    but the learned Single Judge in the judgment has
    specifically observed thus:
    “Having regard to the background that had
    preceded the Policy 2007 and the curtailment of
    the benefits of exemption earlier granted by the
    Policy 1997 through various instruments of law in
    the form of Section 154 of the Finance Act 2003
    read with Schedule 9 thereto as well as the
    notifications under Section 5A of the Central
    Excise Act and other related legislations it
    29
    would be in defiance of logic to conclude that
    all these notwithstanding, with the specific
    intention of excluding the industries engaged in
    the manufacture of goods under Chapter 24 and pan
    masala under Chapter 21 of the First Schedule to
    the Tariff Act, 1985, these would still continue
    to avail the benefits/incentives under the Policy
    1997 only because the units concerned had
    commenced commercial production on and from
    31/3/2007.”
  36. The learned Single Judge has also specifically
    observed in his judgment that the vires of Section 154 of
    the Finance Act, 2003 vide which the exemption granted to
    the manufacturers of cigarette was rescinded with
    retrospective effect, has been upheld by this Court in
    the case of R.C. Tobacco (P) Ltd. and Another Vs. Union
    of India and Another, reported in 2005(7)SCC 725. We are
    surprised at the approach of the Appellate Bench of the
    Gauhati High Court. It is pertinent to note that the
    contention of the learned A.S.G. appearing on behalf of
    the Union of India to the following effect have been
    specifically recorded by the Judges of the Appellate
    Bench of the High Court in paragraph 14 of the judgment,
    which reads thus:
    “that the legality of the withdrawal of the
    benefit granted to the tobacco manufacturing
    units such as the appellant under the 1997
    Industrial Policy by Section 154 of the Finance
    Act, 2003 was already upheld the Apex Court in R.
    C. Tobacco (P) Ltd. vs. Union of India, (2005)7
    SCC 725.”
    30
  37. The Appellate Bench of the High Court observed
    that some of the notifications providing modalities for
    exemption were issued subsequent to the enactment of
    Section 154 of the Finance Act, 2003 and, therefore,
    Section 154 of the Finance Act, 2003 has no relevance in
    the said case. However, the Appellate Bench does not
    find it necessary to even make a reference to the
    judgment of this Court which was relied on by the learned
    Single Judge while dismissing the writ petitions and
    which is specifically put in service by the Union of
    India. We are unable to appreciate as to how the
    Appellate Bench of the Gauhati High Court finds that
    withdrawal of exemption in respect of ‘pan masala with
    tobacco’ is not in the public interest. The legislative
    policy as reflected in Section 154 of the Finance Act was
    to withdraw the exemption granted to the manufacturers of
    cigarettes as well as pan masala with tobacco and that
    too with retrospective effect. Apart from the fact that,
    it is a common knowledge that tobacco is highly
    hazardous, the legislative intent was also unambiguous.
    In these circumstances, the finding of the High Court
    that the withdrawal of exemption for tobacco products was
    not in the public interest, to say the least is shocking.
    We find that the approach of the Appellate Bench of the
    High Court was totally unsustainable.
    31
  38. As already discussed hereinabove, we have no
    hesitation to hold that the withdrawal of the exemption
    to the pan masala with tobacco and pan masala sans
    tobacco is in the larger public interest. As such, the
    doctrine of promissory estoppel could not have been
    invoked in the present matter. The State could not be
    compelled to continue the exemption, though it was
    satisfied that it was not in the public interest to do
    so. The larger public interest would outweigh an
    individual loss, if any. In that view of the matter we
    find that the appeals deserve to be allowed.
    Civil Appeal arising out of S.L.P.(C) No. 36926 of 2012:
  39. The appeal is allowed. The judgment and order
    passed by the High Court of Sikkim dated 11.05.2012 is
    quashed and set aside.
  40. No order as to costs.
    Civil Appeal Nos. 2345 of 2017 and 2346 of 2017:
  41. The appeals are allowed. The judgments and orders
    passed by the Appellate Bench of the Gauhati High Court
    dated 20.04.2016 and 25.05.2016 are quashed and set
    aside. The Order passed by the learned Single Judge dated
    10.12.2010 dismissing the writ petitions is upheld.
    32
  42. No order as to costs.
    ……………….J.
    [ARUN MISHRA]
    ……………….J.
    [M. R. SHAH]
    ……………….J.
    [B.R. GAVAI]
    NEW DELHI;
    SEPTEMBER 19, 2019.